Video game giant Nintendo is back in profit a year after recording its first ever annual net loss. In financial results announced today, covering the first nine months of the current financial year, the company revealed net profits of ¥14.5bn (£101m) compared to a loss of ¥48bn in 2011.

However, the company has revised down sales forecasts for the year. The new Wii U console, which was launched last November, was originally expect to sell 5.5m units by the end of March 2013 – that figure has been revised to 4m.

In its announcement, the company stated: "While Nintendo saw year-on-year increases in the sales of Nintendo 3DS hardware (up 11% year on year) and software (up 41% year on year), those gains were not enough to offset decreased sales of Wii and Nintendo DS hardware and software. Furthermore, the strength of the yen averaged against the euro in the first nine months of Nintendo's fiscal year contributed to an overall 2.4% year-on-year decrease in sales."

Worldwide sales of the 3DS stand at 12.71m units with software at 39.56 million, a decent result aided by the release of major titles such as Mario Kart 7 and Super Mario 3D Land.

Meanwhile, Wii U sales are at 3.06m, with software at 11.69m units. By comparison, sales of the original Wii console, launched in autumn 2006, were at 3.19m by the end of that year and reached 5.84m by 31 March, 2007. Even more tellingly, sales of the Wii, a console in steep decline with very few new releases, is still outselling its successor – shifting 3.53m hardware units and 45.08m units of software in the same period.

Nintendo's financial statement also notes that the company is making a loss on Wii U sales; Nintendo usually sells its hardware at a profit from launch, unlike the other major console manufacturers which tend to make losses on console sales for several months until production costs are reduced.

These remain challenging times for the industry veteran. The company is hoping that forthcoming releases such as Wii Fit U, Mario Kart, Super Mario, Legend of Zelda and LEGO City lift sales of the Wii U this year, but perhaps the biggest challenges are out of its control. Increased competition from smartphone and tablet devices has eaten away at Nintendo's base of casual gamers, while both Sony and Microsoft are expected to announce powerful new consoles this year.